Anyone who has watched the television show Dragons Den™ where would-be entrepreneurs pitch their ideas to a panel of successful business people would have seen that not many new business concepts hold water. At the same time, if one looks at information available on venture capital for new businesses, the appeal for investors seems to be what they commonly refer to as disruptive business models i.e. Uber or Airbnb that challenge traditional business models.
The MiceMaster business concept offers an elegant solution, if not the only solution, to the age-old issue of how to control the hundreds of millions of Rands that corporates spend on external meetings, incentives, corporates and events and can at the same time be described as a disruptive business model. While corporates will save a lot of money by implementing the system, suppliers of MICE services are going to find it very hard to hide anything that is not a fair mark-up, a contractual commission, margin or management fee.
Running on the MICE wheel
MICE is currently the fastest growing travel sector in South Africa. For many companies monies spent on MICE business remains a vague unknown amount procured via laborious, manual processes with very little sign of sound procurement strategies. When asked about volume of spend, many companies enter into a high-end vs low-end debate because MICE spend reporting is (more often than not) non-existent and companies cannot commit to a total spend. Furthermore, a large corporate may try and reduce the number of preferred PCO’s but parallel to this hundreds of suppliers still exist with staff continually adding more to their shot-gun procurement strategy.
Bad briefs equate to massive overspending
Booking a conference is frequently left to the secretary, PA or internal travel organiser to choose whether he/she will use a particular PCO or contact a hotel directly in order to source quotes. At this stage the process is already flawed as favouritism, such as free week-end stays, are commonplace. Because the email or verbal brief is often vague, it gives the venue or PCO license to quote on the minimum amount of services in order to keep the quote totals as low as possible improving their conversion odds. Venues and PCO’s leave essential services like parking, on-site management and specific catering needs off the quote totals in order to keep the total amount as low as possible. For example: sub-totals are bundled as catering™ but there is no detail such as extra costs billed for Halaal or additional drinks that fall outside of the DCP rates.
Paradoxically, if a venue or PCO responsibly includes all the extras they are compromised as the event organiser cannot compare apples with apples within the myriad of quote formats received. Missing items perpetuate confusion and it becomes impossible to see where true value of the quote lies. MiceMaster told us of a 5 star hotel who was discounting their DCP (daily conference rates) to win business but if you wanted anything more than a ham sandwich for lunch, then you should have requested the Executive DCP rate if you wanted a hot meal!
The result of this is that the event organiser issues the order based upon a misleading quote total and then the long list of additional charges start to appear that annihilate budgets requiring multiple authorisation of unforeseen costs. Even long after the event has taken place corporates are unable to reconcile costs.
MiceMaster builds and manages MICE procurement strategies
While corporate air, hotel and car spend is locked down tight with complex travel policies and self-booking tools, suppliers are frequently forced into volume-based negotiations to drive down rates and increase override deals as part of the on-going procurement strategy. MiceMaster manages MICE procurement strategies to achieve the same:
Procurement departments are given access to the MiceMaster procurement module and in conjunction with MiceMaster are able to pre-program the system to not only favour preferred partner suppliers, but also to consolidate MICE spend where volume-based discount negotiations and BBBEE procurement are to be had.
At the click of a mouse procurement is able to manage preferred buying through the system, add a supplier or immediately shut down a rogue supplier that is found to be either over-charging or delivering inferior services. The following supplier categories are pre-programmed and selected according to preference:
– Hotel groups
– Catering companies
– Audio visual companies
– Travel management companies
– Transfer companies
Thereafter procurement departments, normally in association with finance departments, select the financial reports they wish to receive month-end. As users go about procuring conferences via the system, MiceMaster continually talks™ to the procurement department personnel, alerting them of quote requests, rogue behaviour and orders.
Furthermore, MiceMaster reports that many financial departments have no idea to what extent their cash-flow would be altered if all staff charged with sourcing MICE quotes issued orders simultaneously as there are no controls. MiceMaster solves this problem as at any given time, procurement can see what quotes are in the system and what orders have been placed. Most importantly, the system forces the user to explain why a particular venue was issued the order which makes for interesting reading says MiceMaster, The Marketing Director told me to book the 5 star property.
Adding fuel to the fire, people charged with sourcing quotes are often too busy or are late in sourcing quotes, compromising compliance further by only sourcing one quote. MiceMaster can reveal the user activities by date i.e. if Sandy only requested the quote a week before the event or only contacted one venue ¦ why?
At any conference, just because the venue has been given the contract to host the event does not mean that expenditure is under control, 3rd party costs continue to pressurise budgets such as entertainment, décor, guest speakers or team building. MiceMaster records these costs and allocates them to the quotation management modules so at a glance, procurement and finance departments can see additional costs being added. There is still a lot of additional functionality we are building into the latest version of the system that will enhance compliance even further says MiceMaster.
https://micemaster.co.za/wp-content/uploads/2016/11/blog3.jpg4241274wp.micemasterhttps://micemaster.co.za/wp-content/uploads/2017/10/Logo-Update.pngwp.micemaster2016-11-30 08:49:122017-03-07 10:50:21Disrupting the MICE industry